United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED June 28, 2024 No. 23-40375 Lyle W. Cayce ____________ Clerk Transamerica Life Insurance Company,

Plaintiff,

versus Holly L. Moore,

Defendant—Appellee,

versus Jeffrey H. Simpson,

Defendant—Appellant. ______________________________

Appeal from the United States District Court for the Eastern District of Texas USDC No. 4:22-CV-340 ______________________________ Before Richman, Chief Judge, and Graves and Wilson, Circuit Judges. Cory T. Wilson, Circuit Judge: Texas Family Code § 9.301 generally operates to strip “the insured’s spouse” of beneficiary interests in insurance policies once a divorce decree renders the policy beneficiary an ex-spouse. This case turns on whether “the Case: 23-40375 Document: 65-1 Page: 2 Date Filed: 06/28/2024

No. 23-40375

insured’s spouse” includes someone who was named a policy beneficiary before she became the insured’s spouse: Ian Simpson took out a life insurance policy and named his fiancée Holly Moore primary beneficiary and his father Jeffrey Simpson contingent beneficiary. The couple then married, then divorced, and then Ian died without ever changing the policy beneficiaries. The district court held that § 9.301 comes into play only if the insured and the beneficiary were married when the insurance policy was purchased. The court reasoned that because a policy purchased prior to marriage did not name “the insured’s spouse,” a later divorce decree would not divest the beneficiary of insurance proceeds. But § 9.301’s text indicates that “the insured’s spouse” centers on an individual’s status at the time a divorce decree is rendered, regardless of when a policy was first obtained. Therefore, we reverse the district court’s judgment awarding Ian’s policy proceeds to Holly and render judgment in favor of Jeffrey Simpson. I. Ian Simpson purchased a $100,000 life insurance policy (the Policy) from Transamerica Life Insurance Company in February 2018. Ian named his fiancée Holly Moore as the primary beneficiary and his father Jeffrey Simpson (Simpson) as the contingent beneficiary. Ian and Holly married in September 2018 but divorced in January 2021. Their divorce decree stipulates that Holly was “divested of all right, title, interest, and claim in and to . . . [a]ll policies of life insurance (including cash values) insuring [Ian]’s life.” Ian remained owner of the Policy, but he never changed its beneficiary designations. Ian died on May 2, 2021. Holly filed a claim with Transamerica for the Policy proceeds in August 2021. Invoking Texas Family Code § 9.301, Transamerica responded in November 2021 that “Holly [] is not the beneficiary,” and declined to pay her the Policy benefits. Instead,

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Transamerica notified Simpson that he had succeeded to the position of primary beneficiary, and Simpson followed with a claim for the life insurance proceeds. Facing competing claims and asserti